Fix the rear wheel sensor first and go from there. Since the wheel is not providing a signal to the DSC and ABS module that can also be the cause of the egs gear monitoring. The brief power loss to the DSC could have also trigger the trans fail safe. A filter and fluid change might not be bad since it was noted that the fluid was burnt. Fluid only get burnt if the trans is slipping. I used Lucas trans additive in my E34 and Audi A6 Avant. The BMW E34 was a GM trans and the Audi A6 trans was a ZF.

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2006 Infiniti G35
2001 BMW 3.0I E53 X5 Build date 08/2000 SOLD
Lotus Europa 1970 Destroyed by fire
Lotus Europa 1970 S2 Renault Powered
Lotus Type 52 1970 Twincam Webers Powered
PORSCHE 911 Targa 1982 The Garage Queen
Audi Avant donated to Kars for Kids
BMW 525IT Sold
Audi 4000CS Quattro Sold
Jensen Healey Lotus Powered Sold
Opel 1900 Sold
Triumph Spitfire 1971 Sold
Triumph Spitfire 1968 Sold
Plymouth "Cuda" 340 Six pack SOLD